calculate the break even units for each product for each of the preceding sales mixe 649635
USING A COMPUTER SPREADSHEET TO SOLVE MULTIPLEPRODUCT BREAK EVEN, VARYING SALES MIX
The following projected income statement for More Power Company is repeated for your convenience. Recall that the projection is based on sales of 75,000 regular sanders and 30,000 mini sanders.
|
|
Regular |
|
|
|
|
Sander |
Mini Sander |
Total |
|
Sales |
$3,000,000 |
$1,800,000 |
$4,800,000 |
|
Less: Variable expenses |
1,800,000 |
900,000 |
2,700,000 |
|
Contribution margin |
$1,200,000 |
$ 900,000 |
$2,100,000 |
|
Less: Direct fixed expenses Product margin |
250,000 |
450,000 |
700,000 |
|
$ 950,000 |
$ 450,000 |
$1,400,000 |
|
|
Less: Common fixed expenses |
|
|
600,000 |
|
Operating income |
|
|
$ 800,000 |
Required:
1. Set up the given income statement on a spreadsheet (e.g., Excel™). Then, substitute the following sales mixes, and calculate operating income. Be sure to print the results for each sales mix (a through d).
|
|
Regular Sander |
Mini Sander |
|
a. |
75,000 |
37,500 |
|
b. |
60,000 |
60,000 |
|
c. |
30,000 |
90,000 |
|
d. |
30,000 |
60,000 |
2. Calculate the break even units for each product for each of the preceding sales mixes.